‘Country needs to move to technology driven high-skilled exports’

Sri Lanka will take another 140 years to reach a GDP Per Capita of USD 12,000 to get to the high income category of countries, if educational reforms focused on expanding professional education are not expedited, economists said.

Senior Professor in Business Economics, University of Colombo and Vice President, Sri Lanka Economic Association, H.D. Karunaratne said it took the country 70 years to get to a GDP Per Capita of $ 4,000 due to the absence of educational reforms vital to enhance professional skills of youth. The policy makers have been content and complacent about the country’s education system which has failed to lift the country from the low income status for nearly 50 years.

Sri Lanka’s Per Capita Income increased from $ 120 in 1948 to $ 996 in 1998 whereas the GDP Per Capita of Singapore averaged $ 24,547.93 from 1960 until 2018 reaching an all time high of $ 58,247.90 in 2018. The GDP Per Capita of Singapore in 1960 was $ 3,503.40.

Sri Lanka has been a low middle income country from 1998 to 2018 and since then it has been in the upper-middle income category, the largest group comprising around 56 countries whose income range from $ 3,895 to $ 12,000. Sri Lanka’s GDP Per Capita reached $ 4,102 in December 2018 compared with $ 4,104 recorded in the same month of the previous year.

“Sri Lanka is at the tail end of the upper-middle income category and it has a long way to go to triple the current per capita income level,” Prof. Karunaratne said, adding that Sri Lanka’s per capita income has been low because since Independence we have been over dependent on a factor driven economic growth strategy of land intensive exports of tea, rubber and coconut and labour intensive exports of garments.

He said the country needs to move from the traditional labour and land intensive exports sectors to technology driven high skilled exports for which many believe needs high capital investment. This is a myth in economics because without financial literacy having money or borrowing it will not be effective for productive ventures.

“What is essential for Sri Lanka is educational reforms as the next stage of growth would come from trade, tourism and being a financial and maritime hub in the region. To develop the service sector it is crucial to improve skills and professional labour.

Unless educational policy reforms are implemented the country cannot reach the high income country status,” Prof. Karunaratne said adding that the number of professionals be it in the engineering, or finance sector produced in the country is inadequate.

He said all professional institutions are either a monopoly or oligopoly. Policies should be formulated to expand skills oriented vocational training to create skilled workers who could help generate foreign exchange through exports.

Professor in Economics University of Colombo, Sirimal Abeyratne said around 10-20 percent of the graduates seek greener pastures since there aren’t much opportunities and rewards in the country for professionals in the science and technology sectors.

“It is not that we do not have professionals. It is that they go overseas for better prospects which ultimately affects the economy. Investments in human and technological development must be increased to develop skills. The government alone cannot do this. The private sector has a major role to play. The government must support initiatives to develop human capital and technology,” Prof. Abeyratne said.